Congress’ Small Business Tax Schizophrenia

J.D. Foster / July 02, 2010

An old saying applicable to dysfunctional organizations is that the right hand doesn’t know what the left hand is doing. The President and Congress have taken this approach to a whole new level. In seeking to strengthen small businesses to spur badly needed job creation, the left hand doesn’t know what the left hand is doing.

The Congress is being ushered out of Washington for its July 4 recess by a dismal jobs report from the Department of Labor. Despite every kind of budget-busting stimulus bill Congress can devise, beginning with the 2009 Obama whopper weighing in at a tidy $862 billion, the economy remains lethargic and may be slowing. Obama entered office with an unemployment rate of 7.7 percent that now stands at 9.5 percent, has remained above 9 percent for over a year, and is likely to remain above 9 percent well into 2011.

Naturally, Congress doesn’t want to face the voters over the recess having done nothing about the economy lately—other than threaten it with Obamacare, a misguided financial reform, and soaring national debt—and so the Congress tried to push through the “Small Business Lending Fund Act of 2010,” a relatively benign collection of tax relief baubles targeted at small businesses centered on a temporary incentive to encourage small businesses to invest. As Senate Finance Chair Max Baucus said, “When we help small businesses, we help Americans get back to work.” So far, so good. (more…)